Dealroom, a European startup, and venture capital data company, has raised €6 million in a Series A round, according to TechCrunch.

The fresh funding comes nearly two years after the company raised €2.75 million in early 2020. In North America, it competes with a variety of competitors, including PitchBook, CB Insights, and Crunchbase, which I used to work for.

Beringea led the Series A round, which also included Knight Venture Capital and Shoe Investments, two earlier investors in the company. TechCrunch posed a series of questions to Dealroom founder and CEO Yoram Wijngaarde in order to gain a better understanding of the financing.

Dealroom’s Business

Through public scraping and partnerships, the startup obtains data about private-market enterprises. The data is then cleaned and run through Dealroom’s software to “uncover actionable predictions,” as the company describes it.

As a result, Dealroom is made up of three interconnected parts: data collecting, cleansing, and synthesis.

It’s easy to see why one would need more cash to deal with the massive surge of funding events that are sweeping the globe. Companies like Dealroom, for example, should be experiencing something like boom times. The private business landscape, which is their key market mandate, is rapidly increasing, and many new players are flush. Dealroom has a lot of work ahead of it — and a lot of people to sell it to.

The company makes money in a variety of ways, including selling access to its platform as a SaaS and providing an API for both business and government customers. Customer research is also done by the company. According to Wijngaarde, the company has 50 government API customers that account for “about a third of [Dealroom] revenues.”

According to the CEO, the company’s “revenue mix is roughly equally three parts between investors, B2B companies and governments.” So Dealroom’s income stool has three legs: three separate groups are buying what it has to offer.

Returning to our point about Dealroom and its global rivals being in a good position — Crunchbase estimates that ARR will reach $38 million this year — the fact that governments account for such a substantial amount of Dealroom’s revenue feels notable and bullish. Governments are paying more attention to the startup game as it expands more equally over the world, and they’re willing to invest money to better understand their local market and, we assume, those nearby.

TechCrunch questioned Wijngaarde about why his company only garnered €6 million in funding. That’s a modest round in today’s market!

Dealroom’s fresh round was “sized” around both “business needs” and the reality that it “didn’t want to get too far ahead of [itself] based on the availability of capital,” according to the CEO. Dealroom is also lucky to have a strong growing income, along with great capital efficiency, two factors that would reduce a near-term need for more money, and hence dilution.

What’s next?

Dealroom, Crunchbase, and other data companies are very strong at data – having data, collecting data, and so forth. Dealroom intends to perform more clever tinkering with its data in the future. Wijngaarde stated that his company is “focused on expanding the predictive power of the platform, to help our clients discover promising companies at an ever earlier stage.”

If it can do that, at the very least for investors, the company can add a zero to its pricing page. Another firm I worked for, Mattermark, sought to construct something similar. It’s a massive, difficult problem that will necessitate vast amounts of correct, up-to-date data.

Before we go any further, TechCrunch wants to learn more about a certain mechanic in the data harvesting industry. As a result, we inquired as to whether Dealroom considers data collecting and curating to be a cost of sales or a marketing operational cost. Wijngaarde responded as follows:

We count data collection in part as the cost of revenues and in part as product development in [operating expenses]. We also do a lot of human-led research, which is counted as a cost of revenue, but also could be seen as the cost of marketing, as this results in a lot of content marketing.

It turns out that the answer is both. I’d like to learn more about that combination, and I’m confident that we’ll learn more when one of the companies in the private market data sector files to go public.

Source: Tech Crunch